Have you availed of these income tax deductions?

Education Tax Deductions

The month of February and March is spent on investing in tax saving avenues to minimize the income tax outgo. While income tax rebate under section 80 C ( see prev. Post – “Income tax deductions under section 80 C “ for details) is fairly common and most people exhaust their Rs 1,00,00/- limit, there are other lesser known income tax sections for tax saving which are not availed of, mainly because of lack of awareness or just by oversight. Let us highlight these-

Section 80 D The premium paid towards medical insurance qualifies for income tax rebate. The maximum deductible amount is Rs 15,000/- for self and another Rs 15,000/- for dependent parents.  This amount increases to Rs 20,000/- incase the insured are senior citizens ( aged 60 years and above).

Section 80 DDB –If you do not have a medical insurance or are bearing the cost of medical treatment from your own pocket, expenses on certain specific ailments like AIDS, Cancer and neurological diseases can be claimed as deduction up to a maximum of Rs. 40,000/- (Rs. 60,000/- for senior citizens).

Section 80GG – Even if the employer does not provide HRA as part of the salary package, a person staying at a rented place can avail of an income tax deduction towards payment of the rent of Rs 2000/- per month or 25 % of his total income, whichever is less.

Section 80U – If you or one of your dependants suffer from disability, an amount of up to Rs. 50,000/- ( Rs. 1,00,000/- for severe disability)towards treatment is allowed as an income tax deduction.

Section 80G – Any donations made to charitable institutions, trusts and specified institutions qualify for an income tax deduction of 50 % or 100 % of the amount, without any upper limit.

Section 80 E- Interest paid on educational loans qualify for income tax deduction.

Section 24 B- An amount of up to Rs 1.5 lakh per annum for the interest on home loan is deductible. Furthermore, if the property is a second one other than the self occupied one and bought on loan, it is deemed let out and the entire interest paid on the home loan per annum without any upper limit is deductible.

Medical allowance reimbursement for salaried people- Income tax provides a medical allowance of Rs 15,000/- per annum towards day to day medical expenses including dental, chemist bills, optician expenses etc. The amount actually spent is exempt from income tax, and the unused part is taxable. The employee can claim the income tax rebate by furnishing the actual bills to his employer.


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